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INTRODUCTION

The Subclass 457 visa is primarily intended to provide streamlined entry arrangements for businesses needing to recruit skilled staff from overseas on a temporary basis. The 457 visa program is designed to fill skill shortages that cannot be met from the local labour market.

Subclass 457 visa entry streams include:

  • employment in Australia with an approved business who is party to a labour agreement (LA)

  • employment in Australia with an approved standard business sponsor.

The Temporary Work (Skilled) visa (subclass 457) allows skilled workers who are sponsored by an approved business to come to Australia and work for an approved business for up to four years.

You can be in or outside Australia when you lodge your application for migration to Australia. You will be able to live and work in Australia with your family for up to four years in your skilled occupation. 

You may be able to set up your own company to sponsor yourself if you are able to demonstrate a genuine need for the position. After the employer/company is approved as a Standard Business Sponsor, you will be able to apply for a Subclass 457 visa based on the employer's nomination. 

You must work exclusively for your approved Standard Business Sponsor unless you make arrangements to transfer your Subclass 457 visa to another employer or make an application for another type of Australian visa. 


NOMINATING EMPLOYEES

All applicants for approval as a standard business sponsor in relation to the Subclass 457 visa must satisfy the Department of Immigration they meet the prescribed criteria for approval against the current Migration Regulations. This applies regardless of whether your business is operating in or outside Australia.

A distinction is made between applicants who operate a business in Australia and those who do not. Applicants who operate a business in Australia are required to meet the training criterion as defined in the current legislative instrument (depending on the period of time they have been trading), and must also attest to their track record of, or ongoing commitment to, the employment of local labour and declare that they will not engage in discriminatory recruitment practices.

If you are considering sponsoring a foreign national as a Subclass 457 visa standard business sponsor, you must:
  • be a lawfully operating business
  • meet training requirements (Australian businesses only)
  • agree to the number of subclass 457 workers to be nominated, if applicable
  • have no relevant adverse information against your business.
  • demonstrate your commitment to employing local labour as well as non-discriminatory recruitment practices (Australian businesses only).

If your business is not legally established in Australia, you must be able to show that you need a skilled worker to:

  • come to Australia to help establish a business operation or subsidiary with connections with an organisation located outside Australia
  • fulfil, or help to fulfil, a contractual obligation. 

TRAINING REQUIREMENTS 

To be approved as a standard business sponsor, you must either:

  • meet the training benchmarks if you have traded in Australia for 12 months or more
  • have an auditable plan to meet the training benchmarks if you have been trading in Australia for less than 12 months.

If you negotiate a labour agreement, your business will have to meet a similar training requirement as part of the agreement.

Your business must be able to show it has contributed to the training of Australian workers by providing evidence of meeting the training benchmarks. These benchmarks were introduced to ensure that the employment of workers from outside Australia is not seen as an alternative to training Australian workers.


TRAINING BENCHMARKS

If your business has been trading in Australia for more than 12 months, you must show you have contributed to the training of Australians by meeting on of two benchmarks:

  • Training benchmark A: recent expenditure to the equivalent of at least two per cent of the payroll of your business, in payments allocated to an industry training fund that operates in the same industry as your business 
  • Training benchmark B: recent expenditure to the equivalent of at least one per cent of the payroll of your business, in the provision of training to employees of your business who are Australian citizens or Australian permanent residents.

You must provide evidence of expenditure relating to the training benchmarks when you submit your sponsorship application. Not providing evidence can cause a significant delay in processing your application.

Businesses that are not legally established in Australia do not need to meet either of the training benchmarks.


PAYROLL

Payroll refers to the amount of money your business pays in wages to its employees, in the 12 months prior to application lodgment. Payroll expenditure includes any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments that are defined as wages in the Act relating to payroll tax in the relevant State/Territory.

Payments made to contractors or sub-contractors should be included as payroll expenditure if the contractor provides some labour services in fulfilling the requirements of the contract. If payments to contractors are included as payroll expenditure, any eligible training expenditure in respect of the contractors may also be counted towards meeting the benchmarks.

Payments made to overseas workers such as 457 visa holders, students and working holiday makers for labour services should also be included as payroll expenditure.

If you are operating as a sole trader who has not employed any staff and have not drawn a wage from the business itself, the actual profit of your business for the last 12 months may be considered as the equivalent payroll. 

You can show you meet the training benchmarks in relation to your Australian employees by:

  • paying for a formal course of study for your Australian employees
  • funding a scholarship in a formal course of study approved under the Australian Qualifications Framework for your Australian employees
  • employing apprentices, trainees or recent graduates on an ongoing basis in numbers proportionate to the size of the business
  • employing a person who trains your Australian employees
  • paying external providers to deliver training for Australian employees
  • providing on-the-job training that is structured with a timeframe and clearly identified increase in the skills at each stage, and demonstrating all of the following:
  • the learning outcomes of the employee at each stage
  • how the progress of the Australian employee will be monitored and assessed
  • how the program will provide additional and enhanced skills
  • the use of qualified trainers to develop the program and set assessments
  • the number of people participating and their skill and occupation.

Expenditure that cannot count towards this benchmark includes expenditure for training that is:

  • delivered on the job, other than on-the-job training that meets the requirements outlined above
  • confined to only one or a few aspects of the businesses broader operations, unless the training is in the primary business activity
  • only done by people who are not Australian citizens or permanent residents
  • only done by people who are principals in the business or their family members
  • only relating to a very low skill level having regard to the characteristic and size of the business
  • wages paid to staff for the time they spend at training.

AUDITABLE PLANS

An auditable plan must clearly identify how you intend to meet one of the training benchmarks. An auditable plan must:

  • relate to the immediate future (within the next 12 months)
  • clearly articulate the forecast payroll for the next 12 months
  • show the intended expenditure towards training benchmark A or training benchmark B
  • show a clear intent to implement the plan.
  • state the type and duration of training.
  • articulate the total projected expenditure for deliverance.

OBLIGATION TO MAINTAIN EXPENDITURE

Subclass 457 visa sponsors are obligated to continue to meet the training benchmarks for three years following their approval as a sponsor. They are also obligated to keep records of their training expenditure and may be asked to provide such evidence for monitoring purposes. Additionally, they must provide evidence to demonstrate that they met the training benchmarks for each year that they have been an approved sponsor when seeking to renew their sponsorship, vary the terms of their sponsorship or nominate a 457 visa holder under the Temporary Residence Transition Stream of the Permanent Employer Sponsored program.


TEMPORARY RESIDENCE TRANSITION STREAM

To lodge a nomination you must be an approved business sponsor or have lodged a sponsorship application. You can lodge a sponsorship application at the same time as a nomination and visa application. The Subclass 457 visa nomination requires that your business nominate the Subclass 457 visa applicant for a genuine position with your business, in an occupation which is on the Consolidated Sponsored Occupation List (CSOL).

To nominate an eligible occupation on the CSOL, you must: 

  • specify the position to be filled, the skills and experience required for the position and the salary rate to be paid.
  • pay the market rate for the position and must be employed on equivalent terms and conditions to an equivalent Australian employee at the same location.
  • ensure the nominee must also be paid a minimum specified salary for 457 visa purposes. This is called the Temporary Skilled Migration Income Threshold (TSMIT) which is currently $53,900.00 plus superannuation per annum

You may also be required to provide evidence that you have tested the local labour market to ensure there is no suitably qualified and experienced Australian worker available to fill the nominated position.

The nominated occupation should have the same pay, hours of work and leave entitlements as those which are provided to Australian citizens and permanent residents performing the same or similar work in the local labour market. The pay provided according to these terms and conditions is then considered the ‘market salary rate’ for that occupation in that location.

To help determine the applicable equivalent terms and conditions of employment or the ‘market salary rate’, the Department of Immigration will take into account the following:

  • Is there an equivalent Australian worker undertaking the same work your workplace?
  • is there an industrial instrument with provisions for the nominated position already in operation in your workplace?
  • Is the equivalent Australian worker’s terms and conditions of employment set in a collective agreement (enterprise agreement under the Fair Work Act).
  • Is the equivalent Australian worker’s terms and conditions of employment set directly by another industrial instrument under the Fair Work Act?
  • Is the equivalent Australian worker’s terms and conditions of employment underpinned by a safety net contractual entitlement and set in a common law contract.
  • Is the base rate of pay component of the ‘market salary rate’ above the TSMIT? If not, are the guaranteed earnings of the nominated person equal to or greater than the TSMIT (and is it reasonable to include the claimed earnings other than the base rate of pay).

TEMPORARY SKILLED MIGRATION INCOME THRESHOLD (TSMIT)

The TSMIT provides a benchmark against which the ‘market salary rate’ is measured. This aims to ensure that Subclass 457 visa holders can be self reliant and maintain a reasonable standard of living in Australia and not find themselves in circumstances that may put pressure on them to breach their visa conditions.  This is partially due to a Subclass 457 visa holder's ineligibility to access government income support payments and other government-funded services.

The TSMIT has no bearing on what a Subclass 457 visa holder should be paid in the workplace. It is not possible for an Australian business / sponsor to inflate a nominated person’s proposed salary in order to meet the TSMIT requirement, as it is the base rate of pay under the ‘market salary rate’ for the nominated occupation that is compared to the TSMIT, not the nominated person’s proposed salary.

A nomination under the Subclass 457 visa program would not meet the legislative criteria if the base rate of pay under the ‘market salary rate’ is below the TSMIT.


MARKET SALARY RATE

A Subclass 457 nomination submission must demonstarte that the terms and conditions of employment of the nominated Subclass 457 visa holder (the nominee) will be no less favourable than the terms and conditions that:

  • are provided to an Australian citizen or an Australian permanent resident for performing equivalent work at the same location or
  • if there is no Australian citizen or permanent resident performing equivalent work at the same location, would be provided to an Australian citizen or Australian permanent resident performing equivalent work at the same location, as determined using the method specified in the legislative instrument.

LABOUR MARKET TESTING (LMT)

The LMT requirements for Subclass 457 visa nominations were introduced by the Migration Amendment (Temporary Sponsored Visas) Act 2013. The Migration Act was amended to provide that, in order for a nomination to be approved, the LMT provisions must be satisfied unless the sponsor is exempt under the provisions of the Migration Act.

The Migration Act provides exemptions from the labour market testing condition in the case of a major disaster and in relation to the required skill level and occupation for a nominated position, that is, all occupations which are classed as ANZSCO Code 1 or 2.


INTERNATIONAL TRADE OBLIGATIONS 

LMT exemptions may appliy to Subclass 457 visa  sponsors if it would not be inconsistent with Australia’s international trade obligations to be required to satisfy the LMT provisions.

Australia’s international trade obligations fall under two categories:

  • World Trade Organization General Agreement on Trade in Services (WTO GATS) Commitments
  • free trade agreements.

International trade obligations of Australia that have been determined to be obligations where it would be inconsistent under Australia’s agreement with the other country to require your business to satisfy the labour market testing condition are specified in a legislative instrument.

The legislative instrument specifies international trade agreements and obligations therein relevant to the application of the labour market testing condition to nominations by standard business sponsors. 

In summary, the LMT provisions do not apply where it would conflict with Australia’s international trade obligations, in any of the following circumstances:

  • The foreign national nominated by your business is a citizen/national of Japan or Thailand, or is a citizen/national/permanent resident of Chile, Korea or New Zealand.
  • The foreign national you nominate is a current employee of a business that is an associated entity of your business that is located in an Association of South-East Asian Nations (ASEAN) country (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam), Chile, Japan, Korea or New Zealand.
  • The foreign national you nominate is a current employee of an associated entity of your business who operates in a country that is a member of the World Trade Organisation, where the nominated occupation is listed below as an “Executive or Senior Manager” and the nominee will be responsible for the entire or a substantial part of your company's operations in Australia.
  • Your business currently operates in a World Trade Organisation member country and is seeking to establish a business in Australia, where the nominated occupation is listed in the 'legislative instrument' as an “Executive or Senior Manager”.
  • The foreign national you nominate is a citizen of a World Trade Organisation member country and has worked for your business in Australia on a full-time basis for the last two years.

DIRECT ENTRY STREAM 

Once your employer has been approved as a Standard Business Sponsor and has nominated you for a Subclass 457 visa, the last step will be to apply for your Subclass 457 visa.

To be considered for a Subclass 457 visa you must:

  • Be nominated to work in an approved occupation on the Consolidated Skilled Occupation List (CSOL)
  • Meet the skill requirements for your nominated occupation
  • Meet registration and licensing requirements, if applicable
  • Demonstrate that you meet the English language requirement.

SKILL REQUIREMENTS FOR YOUR SUBCLASS 457 VISA

You do not necessarily need to be formally qualified in your occupation and previous work experience may be taken into account for meeting the skill requirements for your nominated occupation. 

If your nominated occupation is a trade occupation, you may be required to provide a skills assessment.

If it is necessary for your to hold registration, licensing or professional membership to work in your nominated occupation and you provide written evidence from the relevant Australian body of registration or written evidence of eligibility for registration, the skills requirement can be considered met without further enquiry.

If you are required to provide a skills assessment but have evidence of having obtained registration or licensing in Australia, you may also be considered to have met the skills requirement without needing to provide the assessment. In these circumstances, eligibility for licensing or registration would not remove the requirement for you to provide a skills assessment.

If your nominated occupation is Project and Program Administrator or Specialist Manager not elsewhere classified, you will need to complete a skills assessment for migration purposes.


ENGLISH LANGUAGE REQUIREMENTS FOR YOUR SUBCLASS 457 VISA

If you are sponsored by a Standard Business Sponsor, you must show that you have English language proficiency that is equivalent to:

  • an International English Language Testing System (IELTS) test score of at least 5 in each of the four test components of speaking, reading, writing and listening, or
  • a score of at least 'B' in each of the four components of an Occupational English Test (OET).

You do not need to meet the IELTS requirement if your nominated occupation does not need a level of English language proficiency for a grant of registration or license and any of the following are applicable to your circumstances:

  • You will be paid a salary that is more than the English-language-requirement exempt amount. This amount is set at a gross base salary excluding all deductions. The current amount is specified in a legislative instrument. Grant of your Subclass 457 visa will need to be in the ‘best interests’ of Australia.
  • You hold a passport from Canada, New Zealand, the Republic of Ireland, the United Kingdom or the United States of America.
  • You have completed at least five years of continuous full-time study in a secondary or higher education institution where instruction was conducted in English. 

SPORTSPERSONS

Sport based occupations for a Subclass 457 visa require high levels of personal commitment, physical fitness, sporting ability and experience in lieu of formal qualifications.

Key factors in determining whether you as a Subclass 457 visa applicant have the skills as a sportsperson include:

  • An employment record as an elite full-time professionalin your nominated occupation
  • Recent experience as a full-time elite player or coach for a substantial period under Australian occupation standards - for example, occupations in ANSZCO unit group 4523 Sports Coaches Instructors and Officials require a minimum period of at least 3 years relevant work experience.
  • Relevant work experience that does not include experience as a trainee, apprentice or cadet and/or non-professional experience
  • The nominated position for your Subclass 457 visa does not require you to supplement your sporting activities with ancillary work or income.

Your elite and professional status as a Subclass 457 visa applicant should be demonstrated by past income records. The income must be substantiated against national income levels and be the principal source of income. You may also be asked to provide references from the relevant national administrative body of the sport in which you are engaged supporting your skill level and income received.


CHEFS AND COOKS

In assessing your skills as a Subclass 457 visa applicant for a chef or cook occupation, we first consider if you are required to obtain a Subclass 457 visa skills assessment.

If no formal skills assessment for your Subclass 457 visa is required, and formal trade training is the standard method of entry into a particular cuisine, such Italian cooking, your Subclass 457 visa nomination should reflect the requirement of formal trade qualification. Under Australian occupation standards, Chefs are considered to be professionals at the Diploma level or higher, whereas Cooks are at the Certificate III level (which includes at least two years on the job training). According to.

If your nominated Subclass 457 visa position relates to a type of cuisine for which formal trade training is not common,  the nominated position should be seeking a person with on-the-job training as a cook in an establishment of good standard where experience in the skills and attributes required for the position can be demonstrated.


BUTCHERS AND SMALLGOODS MAKERS

Butchers and Smallgoods Maker apprentices in Australia are required to complete a Certificate III in Meat Processing. Alternative qualifications such as a Certificate in Food Processing would not be considered sufficient to satisfy the skills requirement for your Subclass 457 visa and might suggest that you have nominated the incorrect occupation.


MEDICAL REGISTRARS

If you are currently in the process of completing your medical based training your position can be known by various terms throughout the process, such as Resident Medical Officer, Junior Registrar and Registrar.

If any of the above titles apply to your position, you may nominated the occupation of Resident Medical Officer (ANZSCO 253112) for your Subclass 457 visa which also includes the occupation of Medical Intern as a specialisation. This is aimed to primarily ensure that different nominations are not required each time you start a new rotation in a different speciality.

If, after the initial period of hospital based training, you choose to specialise in a particular field and accepts a position as a Registrar that particular speciality, it may be appropriate for you to nominate the relevant specialist Medical Practitioner occupation. For example, a doctor working as a Cardiology Registrar could be nominated in the occupation of Cardiologist, or a Paediatric Surgical Registrar could be nominated in the occupation of Paediatric Surgeon.

In such cases, your Subclass 457 visa skills requirement may be satisfied if you hold the relevant qualifications and have the relevant level of registration with AHPRA.

© Copyright 2019 CNA Immigration Pty Ltd 

Migration Agent Registration Number 0851787

        

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